Time was, not very long ago, when a visitor to the Solicitors Disciplinary Tribunal would be presented with a diet of thefts from client account, serious Accounts Rules breaches, or solicitors who for one reason or another could no longer run their practices. Today, the same visitor might well see decent, bewildered, and sometimes angry solicitors being hauled before the SDT and, often, being dealt with by a modest fine.

Many strands have contributed to these changes. The Office for the Supervision of Solicitors transmogrified into the SRA and a new, more interventionist, style of regulation has held sway since. The funding revolution in civil litigation in the 1990s fundamentally altered the way in which solicitors could attract and carry out their work. This led to controversy around issues such as whether a payment was or was not a prohibited referral fee, and whether an introducer of personal injury work was operating on a contingency fee basis. Even if clients were rarely, if ever, prejudiced (as one of the SRA’s first major initiatives, the Referral Fee Compliance Project ultimately appears to have established) solicitors were still pursued with some vigour.

Changing the rulesThe single most dramatic change was in the size of the rule book. The first set of rules, the Solicitors’ Practice Rules 1936, made by virtue of section 1 of the Solicitors Act 1933, comprised seven rules (in reality only four) and could be printed on one page. In summary this comprised – rule 1: no touting; rule 2: no charging under the published scale fees (!); rule 3: no fee-sharing; rule 4: no association with ambulance chasers.

Slowly the number of rules increased but, for generations of solicitors, the answer to ethical dilemmas was straightforward – if it felt wrong, it probably was wrong. Always put your clients’ best interests first. Never take unfair advantage. Don’t put yourself in a position where your interests conflict with those of your clients. Never knowingly mislead anyone. And, above all, never, ever, dip into client account to smooth out your practice’s cashflow problems.

That instinctive knowledge still holds good. But today it is accompanied by a detailed and highly prescriptive set of rules. The Code of Conduct, introduced in July 2007, runs to more than 200 pages and is frequently being amended. The greater the number of rules, the greater the opportunities to break them, whether innocently, recklessly or deliberately. But does a breach of a rule necessarily entail professional misconduct by the solicitor? We believe that this question must be answered in the negative.

Until the coming into force of the Code of Conduct, there was a distinction between statutory misconduct (breach of rules that had the force of law), and non-statutory misconduct, ie conduct which the tribunal and the judges from time to time consider to be professionally improper. Thus, ‘conduct which would be regarded as improper according to the consensus of professional, including judicial, opinion could be fairly stigmatised as such whether it violated the letter of a professional code or not’. This form of professional misconduct became known as conduct unbefitting a solicitor.

Historically it has always been the case, until this recent revolution, that solicitors were not penalised for making mistakes – ‘generally the honest and genuine decision of a solicitor on a question of professional judgment does not give rise to a disciplinary offence’. Only if the mistake was so egregious that no reasonable solicitor could make it would it become a matter of professional conduct – that is, if it was ‘inexcusable and such as to be regarded as deplorable by his professional colleagues’.

Unfortunately, since the code came into force the distinction appears to have been lost. A breach of any part of the Code of Conduct is treated as strict liability, and solicitors are treated as being liable to a sanction (and a direction to pay the SRA’s costs) for any such breach.

Further, the new policy of the SRA does not seem to have been consistent in cases prosecuted before the tribunal. Sometimes the prosecutor alleges unbefitting conduct and sometimes simple rule breaches. Sometimes the rule breaches are said to amount to unbefitting conduct. Sometimes the issue is not addressed either way.

This is unsatisfactory. The SDT should be required to deal with only the most serious examples of professional misconduct committed by solicitors. The less serious matters should be dealt with in-house by the SRA, by way of letters of advice, reprimands, and, in the not-too-distant future, the imposition of modest fines. The fact that a breach of a rule of conduct may be professional misconduct does not mean that it must be so. All must depend upon the context and gravity of the breach, and the mindset of the solicitor at the time.

By way of example, if a solicitor lends money to his client without the client being given independent advice, there is a breach of rule 3 of the code. But if the loan is on highly beneficial terms to the client and plainly an act of generosity on the part of the solicitor, that breach could not sensibly be described as conduct unbefitting a solicitor.

We believe therefore that it is essential to maintain the distinction between rule breaches on the one hand, and professional misconduct – or conduct unbefitting a solicitor – on the other. Only professional misconduct should attract a sanction, properly so called, save for the well-established historical exception of the Solicitors’ Accounts Rules. Rule breaches that do not offend to that extent should be dealt with constructively by advice or guidance.

When, from a date yet to be appointed, the SRA acquires the power to publicise ‘rebukes’ it must be recognised that such publicity is a material sanction in its own right, which has potentially a very serious penal effect in an internet age and a competitive market.

A further and linked question is the extent to which a partner in a firm should be punished for the professional failings of a colleague. If our analysis earlier is correct, there should be no question of a partner in a firm of solicitors being guilty of professional misconduct merely because he is the partner of a solicitor who has offended.

This was precisely the result reached by the Divisional Court in Akodu v SRA. It is scarcely controversial and strange that the opposite view had been advanced. Plainly, if there has been a failure of supervision of an employee who has misconducted himself or herself, that may amount to professional misconduct by the partner concerned (by reason of the failure to supervise properly, not as a form of vicarious liability for the primary offence) but partners in firms of solicitors should not be required to look over the shoulders of fellow partners to ensure that the latter are not misconducting themselves.

Who’s to blame?We have recently seen a worrying trend for SRA caseworkers to quote rule 5 of the code in this context. Rule 5 imposes minimum standards in relation to the management of a solicitors’ business. The argument runs: partner A did something wrong, so partners B to K must be guilty of the same fault because they failed to ensure that the business was effectively managed to ensure compliance, contrary to the requirements of rule 5.

This is, in our view, wrong, and dangerously wrong; it is an attempt to create not only strict liability but vicarious liability as well. There may be a breach of rule 5 if the partners had failed to establish adequate systems of management and supervision. But it is not a breach of the rule, or otherwise something creating liability upon innocent partners, if one person does something wrong in a firm which has perfectly satisfactory systems.

It is to be hoped that the SRA will abandon its new practice of prosecuting for breaches of the rules in the Code of Conduct on the basis that any breach of the rules is deserving of a sanction, and revert to its previous practice of alleging conduct unbefitting a solicitor (doubtless exemplified by specific rule breaches where appropriate). This would be fair to the profession, helpful to the tribunal, and absolutely in accord with the statutory obligation imposed on the SRA under section 28(3) of the Legal Services Act to have regard to the principles under which regulatory activities should be transparent, accountable, proportionate, consistent, and targeted only at cases in which action is needed.

The SRA is publicly committed to a further radical change; the replacement of the Code of Conduct by a new rule book well before the code’s fifth anniversary, and a new ‘adult’ relationship with the profession. This would be entirely consistent with the course we advocate, but has yet to become apparent at casework level.

We are told that, in future, it will be the end product that matters, the ‘outcome’ – whether for example, the client has been well served and not whether all the boxes have been ticked. That sounds to us rather like the approach to what is or was unbefitting conduct.

Andrew Hopper QC and Gregory Treverton-Jones QC are the co-authors of The Solicitor's Handbook 2009